All you need to know about credit risk

All kinds of investments entail some amount of risk. Credit risk, however, takes the center stage in fixed-income investment. One of the most popular debt instruments are the debt funds. Before investing in debt funds, you need to be aware of the manner in which you may entail credit risk.

What is Credit risk in Mutual Funds?

Debt funds make money by way of interest earned on the underlying assets i.e. debentures, bonds, treasury bills and the likes. Apart from that, the underlying security is obliged to repay the principal upon maturity. Debt funds are exposed to credit risk when